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2024 Supreme(Raj) 1670
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
SAMEER JAIN, J.
Saurabh Agrotech Pvt. Ltd. – Appellant
Versus
Vijay Solvex Limited – Respondent
S.B. Company Appeal No. 1 of 2015
Decided On : 18-10-2024
Important Points
The Companies Act, 2013 bars civil court jurisdiction in company disputes, mandating adjudication by the National Company Law Tribunal.
Subject
Corporate Law - Company Law
Act Referred
COMPANIES ACT : S.10(f), S.108, S.111(4), S.424, S.429, S.430, S.434, S.434(1)(c), S.59
Company Law Board Regulations : R.44
CRIMINAL PROCEDURE CODE : S.195
EVIDENCE ACT : S.123, S.124
INDIAN PENAL CODE : S.193, S.196, S.228
Headnote
(A) Companies Act, 2013 - Sections 424, 430, 434(c) - Jurisdiction of Company Law Board - Appeal against dismissal of application for rectification of share register - The appeal was dismissed as the Company Law Board had jurisdiction to adjudicate the matter, and the issues raised were not purely civil in nature but required judicial examination. The court emphasized that the provisions of the Companies Act, 2013 bar civil court jurisdiction in such matters. (Paras 18.1, 18.2, 18.3)
(B) Jurisdiction - The court reiterated that the jurisdiction of civil courts is barred under Section 430 of the Companies Act, 2013, and the matters pertaining to company disputes must be adjudicated by the National Company Law Tribunal. (Paras 18.6, 18.7)
Advocate Appeared:
For the Appellants : Harshit Tholia, Anuroop Singhi, Rahul Khandelwal, Aditya Vijayvergia
For the Respondents: Narendra Mohan, Amol Vyas, Utkarsh Sharma, Saumil Sharma
JUDGMENT :
SAMEER JAIN, J.
1. The instant appeal is preferred with the following prayers:
“It is, therefore, most humbly and respectfully prayed that this Hon’ble Court may graciously be pleased to:
(a) Admit the present appeal and call for the record of CP No. 23/111/2010 with CA No. 167/13 from the Company Law Board, New Delhi Bench, New Delhi.
(b) Set aside the order dated 22/10/2014 passed by the Company Law Board, New Delhi Bench, New Delhi in CA No. 167/2013 in CP No. 23/111/2010.
(c) Allow CA No. 167/2013 filed by the appellants before the learned Company Law Board, New Delhi Bench, New Delhi.
(d) Pending hearing and disposal of the present appeal, stay further proceedings in the subject Company Petition being CP No. 23/111/2010 pending before the Company Law Board, New Delhi Bench, New Delhi.
(e) Pass ad interim ex-parte order in terms of prayer (d) above.
(f) Pass such other or further orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.”
2. For the sake of convenience the provisions relied by the parties are tabulated herein-below:
| Provisions of law | Head note | Statute |
| Section 2(29) | Definition - ‘Court’ | Companies Act, 2013 |
| Section 435 to 446 | (Chapter XXVIII) Special Courts | Companies Act, 2013 |
| Section 408 | Constitution of National Company Law Tribunal | Companies Act, 2013 |
| Section 43, 56, 58, 59, 430 | (Chapter IV) Share Capital and Debentures | Companies Act, 2013 |
| Section 10 FB | Constitution of National Company Law Tribunal | Companies Act, 1956 |
| Section 10E | Constitution of Board of Company Law | Administration Companies Act, 1956 |
| Section 10F | Appeal against the orders of Company Law Board | Companies Act, 1956 |
| Section 10GB | Civil Court not to have jurisdiction | Companies Act, 1956 |
| Section 108 | Transfer not to be registered except on production of instrument of transferred | Companies Act, 1956 |
| Section 111 | Power to refuse registration and appeal against refusal | Companies Act, 1956 |
| Section 111(A) | Rectification of register on transfer | Companies Act, 1956 |
| Section 26 | When instrument may be rectified | Specific Relief Act, 1963 |
| Section 31 | When cancellation may be ordered | Specific Relief Act, 1963 |
| Order VII Rule 11 | Rejection of Plaint | Code of Civil Procedure, 1908 |
| Rule 44 | Saving of inherent power of the Bench | Company Law Board Regulations, 1991 |
3. The present appeal is preferred under Section 10F of the Companies Act, 1956, assailing the judgment dated 22.10.2014 passed by the Company Law Board, New Delhi in CA No. 167/2013 in CP No. 23/111/2010, vide which the application filed by the appellant under Rule 44 of Company Law Board Regulations, 1991, praying dismissal of the company petition at the threshold, is dismissed.
SUBMISSIONS BY THE APPELLANTS
4. Learned counsel appearing for the appellants averred that the germane facts for consideration of the instant matter have been that the respondents preferred a Company Petition (bearing no. 23/111/2010) under Section 111(4) of the Companies Act, 1956 (hereinafter referred to as the Act of 1956) vis-à-vis rectification of share register of appellant no. 1-Company, seeking removal of the names of appellant nos. 2-5, and for restoration of their names in the place of the appellants.
5. It was further averred that the said removal of names, has been sought primarily qua the private dispute ongoing inter-se between the parties. The respondent no. 1-Company has been registered under the provisions of the Act of 1956, qua which the appellants and non-appellants have been the share-holders/members. Resultant to which the appellant filed share transfer deed under section 108 of the Act of 1956.
6. Further, it was contended that the nature of the allegations made therein, were to be adjud
